Working Backwards: Insights, Stories, and Secrets from Inside Amazon

by Colin Bryar

“Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume. They benchmark themselves and their teams against the best.”

Properly evaluating your business and striving to improve each week requires a willingness to openly discuss failures, learn from them, and always look for inventions that will delight customers even more.

Amazon’s Working Backwards process—starting with customer needs, not corporate needs or competencies—often demands that, in Jeff’s words, we “exercise new muscles, never mind how uncomfortable and awkward-feeling those first steps might be.”

What’s crucial to understand is that a small number of very big winners can pay for a large number of experiments that fail or succeed only modestly.

In an interview after the Fire Phone was withdrawn, Jeff was asked about its failure and answered, “If you think that’s a big failure, we’re working on much bigger failures right now—and I am not kidding.”

“Some decisions are consequential and irreversible or nearly irreversible—one-way doors—and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that—they are changeable, reversible—they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.”

“We must be committed to constant improvement, experimentation, and innovation in every initiative. We love to be pioneers, it’s in the DNA of the company, and it’s a good thing, too, because we’ll need that pioneering spirit to succeed.”

It would take several years for our digital effort to gain a foothold and become a meaningful business.

In other words, his first action was not a “what” decision, it was a “who” and “how” decision. This is an incredibly important difference. Jeff did not jump straight to focusing on what product to build, which seems like the straightest line from A to B. Instead, the choices he made suggest he believed that the scale of the opportunity was large and that the scope of the work required to achieve success was equally large and complex. He focused first on how to organize the team and who was the right leader to achieve the right result.

Jeff was a student of history and regularly reminded us that if a company didn’t or couldn’t change and adapt to meet shifting consumer needs, it was doomed. “You don’t want to become Kodak,” he would say, referring to the once-mighty photography giant that had missed the turn from film to digital. We weren’t going to sit back and wait for this to happen to Amazon.

At some point in the debate, someone asked Jeff point blank: “How much more money are you willing to invest in Kindle?” Jeff calmly turned to our CFO, Tom Szkutak, smiled, shrugged his shoulders, and asked the rhetorical question, “How much money do we have?”

In mid-October 2004, several senior Amazon executives received an email from Jeff Bezos that read roughly as follows: We should not be satisfied with the growth of our retail business. This is a house-on-fire issue and we need to dramatically improve the customer experience around shipping. We need a shipping membership program. Let’s build and launch it by the end of the year.

The “institutional no” is a big reason why Amazon could have made an error of omission in this case. Jeff and other Amazon leaders often talk about the “institutional no” and its counterpart, the “institutional yes.” The institutional no refers to the tendency for well-meaning people within large organizations to say no to new ideas.

Staying the current course offers managers comfort and certainty—even if the price of that short-term certainty is instability and value destruction later on.

It’s what drives frontline managers to keep their top performers working on a current project and say no to their involvement in high-risk experiments that could fail but could also pay off handsomely later—especially if that payoff is likely to be after the manager has moved on to another role.

Now we needed to find a team to build it. What came next was a clear expression of another one of Amazon’s Leadership Principles in action, Have Backbone; Disagree and Commit: “Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.”